In just three months, the 36 states and the Federal Capital Territory (FCT) of Nigeria’s internal debt rose by N198.96 billion.
This aligns with the Debt Management Office’s (DMO) most recent subnational debt report.
Between March 2024 and June 2024, the total domestic debt of states and the Federal Capital Territory increased by 5%, from N4.07 trillion to N4.27 trillion.
The News Chronicles noted that the states’ debt levels varied, with some reporting notable rises and others showing very slight adjustments or decreases.
Rivers, Taraba, And Niger Report Significant Debt Growth
The state with the largest percentage growth in debt throughout the reviewed period was Rivers State. The state’s debt increased by N156.62 billion, or 67%, from N232.58 billion in March to N389.20 billion in June.
In the same way, Taraba State’s debt increased by 160%, from N32.64 billion to N84.72 billion, or N52.08 billion more.
As a result, Niger State’s debt stock increased by 70%, from N86.07 billion in March to N60.22 billion at the end of June, for a total of N146.29 billion.
These dramatic increases raise questions about the sustainability of such debt levels because they demonstrate a heavy reliance on borrowing to fund government initiatives and other commitments.
Lagos Maintains Its Lead Despite The Decline
The debt stock of Lagos State, which still has the biggest debt load of any state, decreased by 5%.
The state’s domestic debt decreased by N43.42 billion, from N929.41 billion in March to N885.99 billion in June.
The debt profiles of states like Nasarawa, Kwara, and Benue showed little to no improvement. While Kwara’s debt stock decreased marginally by N23.12 million, Benue’s saw a minor increase of N144.24 million. Nasarawa saw a little decrease of 187.64 million in the same time frame.
On the other hand, Delta State accomplished one of the biggest debt stock reductions, reducing its domestic debt by N30.36 billion, or 9%, from N334.90 billion in March to N304.54 billion in June. Additionally, the states of Bayelsa and Ebonyi could lower their debt by 6% and 9%, respectively.
What To Note
By the end of the second quarter of 2024, Nigeria’s public debt stock had risen to N134.3 trillion ($91.3 billion), according to an exclusive report from THE NEWS CHRONICLES. Compared to the N121.7 trillion ($91.5 billion) reported by the Debt Management Office (DMO) for the first quarter, this represented a 10.35% rise.
The influence of currency fluctuations on debt valuation is highlighted by the fact that, despite an increase in overall debt in naira terms, the debt’s dollar equivalent was comparatively steady.
Strategic borrowing patterns may be seen in Nigeria’s foreign and domestic debt portfolios, with domestic debt still accounting for most of the country’s governmental debt in Q2 2024.
External debt comprised 47% of the total, or N63.1 trillion ($42.9 billion), while domestic debt comprised 53%, or N71.2 trillion ($48.4 billion).
